The Institute of International Finance (IIF) said here Monday that the Arab states in transition in the Middle East and North Africa (MENA) region would continue to depend on foreign aid from the oil-rich Gulf states, albeit a form of stabilization in the North African countries was in sight.
Speaking at a media round-table organized by the Dubai International Financial Center Authority, Dr. Georg Abed, senior counselor and director for Africa and the Middle East at the IIF, said after nearly three years of political turmoil and uncertainty, the Arab countries in transition in the MENA region, such as Egypt, Tunisia, Yemen or Syria, were yet to see the light at the end of the tunnel.
The IIF expected the gross domestic product (GDP) in Egypt and Tunisia to grow by 2.5 percent and 3.5 percent in 2014, respectively, up from 2.1 percent and 2.6 percent this year.
Abed said Syria suffered the most, "as the Syrian GDP declined by 50 percent year on year because of the unrest," adding that the turnaround in Syria had yet to happen.
Meanwhile, Abed said the IIF observed a halt in the decrease of trade between North Africa and the southern European states, as the latter were recovering from the Euro zone debt crisis.
Abed said the IIF expected the Euro zone which was hit by a severe recession this year to recover 1.5 percent in 2014, which would increase inter-Mediterranean trade between Italy, Spain and Greece and the Arab oil importers -- Morocco, Tunisia and Egypt.
Commenting on the United Arab Emirates (UAE)'s recent decision to invest 4.9 billion U.S. dollars to support development projects, including housing, medical and food, in Egypt, Dr. Garbis Iradian, the IIF's deputy director for the MENA region, said that such help from the Gulf states would continue to be a sort of lifeline for Egypt.
However, Abed pointed out that although Saudi Arabia, Kuwait and UAE sent a combined financial aid package worth 12 billion dollars to Egypt in July after the Egyptian military ousted president Mohamed Morsi, "these capital flows are an emergency help and cannot replace urgently needed political and economic reforms."